A big energy development from the snow-tinged talking shop Davos, where
Russia's Prime Minister Dmitry Medvedev hinted at an end to Gazprom's
monopoly on exporting natural gas.
Talking with Bloomberg TV, Mr. Medvedev said this may happen as long as it doesn't harm Russia's economic interests.
Gazprom, the world's largest natural-gas producer, is Europe's
single largest supplier. But its smaller rival Novatek has been
lobbying for permission to join the export jamboree, using LNG in
tankers rather than Gazprom's traditional delivery method of pipeline.
Gazprom has been a belligerent force in the gas-supply
business, and was long viewed as implementing state policy, especially
in the delivery of gas to Russia's former Soviet neighbors.
Now Ukraine, a country that has in the past particularly felt
the force of Gazprom's heft, is expected to sign a potential $10 billion
natural gas and production deal with Royal Dutch Shell, the Financial
Times says, marking a move away from its reliance on Gazprom's gas.
There are a host of factors working against Gazprom: weak
natural gas demand in its core European markets; growing output in
Norway and the potential for huge finds in the Mediterranean; pressure
for a move away from oil-linked pricing; and the emergence of oil
company Rosneft as the new Kremlin energy favorite.
Fitch says Russian oil production is nearing a peak, though,
meaning natural gas will be a key market for years to come. Talks to
supply China are continuing, and being approached with a light touch,
but could be undermined by China's shale plans.
The Streetwise Professor takes a close look at Gazprom and
concludes that its future ties in not only with Russia's well-being, but
has ramifications across Europe and into the Middle East.